I have a tenant that has been with me for several years. She is a disabled vet and has been a great tenant, she usually pays her rent about 3 weeks early each month and takes great care of the house. I received this text from her yesterday:

"I was made aware that the government may not pay veterans this month, if that is the case I will not be able to cover the rent. I'm just letting you know ahead of time to be prepared."

If you are not aware, the pending government default is what she is talking about. I know a few years ago, there were many S8s that went a month or more with delayed payments so there is some truth in what she speaks. While it is a shame that our elected officials can't work together to resolve this amicably, I do have to say that we can't keep increasing the debt, it's unsustainable and not fair to our children and grandchildren to leave them in such a predicament.

So, how would you respond to her and how would you handle the situation if she can't make rent on time?

There's an old saying that covers this, "Your failure to prepare doesn't make your emergency into mine."

Heartless? Cold? Greedy? Well.... let's think about this.

Say your tenant is not a Vet, but simply a person on social security. Those checks will also be delayed if the Govt shuts down, along with most other entitlements. Would you be willing to let them stay put 1 - 2 months or however long it takes with no penalty and no payment?

Let's take it a step further. What if your tenant is a regular old W-2 "wage slave" working away at their job, and due to the Govt shut down we have an ecomonic slump and they get laid off at their job. No money... no rent. How would you respond?

At the end of the day, I treat everyone fairly, according to our business rules. If I choose to make exceptions to policy, they are MY decision, not the tenants, and I document them as exceptions for reason X, Y, or Z. Maybe I just love veterans because I am one myself.

But what I DON'T like is someone like your tenant who says, "Well.... I've never saved any money back, so if the Govt defaults I guess I'm going to turn my problem into your problem, Mr. Land lord."

The sheer gall it takes to ANNOUNCE to someone that you aren't going to pay and then tell the landlord that he/she must "be prepared" is what bothers me. Do they plan to also go to the grocery store and amount that they will be taking food home and not paying because the Govt is shut down? How about the other providers of goods and services? Do they plan to just keep taking without paying? IF not, then why do they figure you should just roll over and meekly go along with it?

Your tenant failed to be prepared. Now she DEMANDS that you be prepared? That is not acceptable.

Now if the person messages me and explains their problem and ask for some arrangement.... well, we can usually work something out. But just telling me that I'm not getting paid? Nope...that doesn't fly at all.

I'd respond something like this:

"Dear Tenant. Thank you for reaching out early. I always appreciate advance communication. As you know, we have bills and expenses that must be paid on time for this property, and we rely on your rent payment to cover those expenses just like you rely on your Govt check to meet your expenses. I urge you to make arrangements now in advance so that your rent is paid on time so we avoid any issues. To show my appreciation for your communication, I would be happy to divide your rent payment up into weekly installments until such time as the Govt reopens. This will save you a ton of late fees and also keep your rent current. I'll just need you to sign an addendum to this effect that this is our new plan going forward."

This gives her time to make arrangements. She can call family, friends, former co-workers, local rental assistance agencies. Or if she has any decent relationship with her bank, she can get a signature loan to cover 1-2 month's of rent.

Why has she not tried all of those avenues before expecting you to take the hit and wait?

Bottom line: If you provide solutions that work for you, then that's very gracious and understanding of you to do so. You are under no obligation to do so, so it's all grace if you choose to. If they refuse, boot 'em. If they accept, YAY!

To answer Sid's questions...

For a Vet? Yes, I'd go with what others said above and wait it out and get paid.

For someone else on SSI? Yes, I'd do the same.

For the W-2 who loses their job/income because of the "economic slump"? No.

Why are these different? My ability to collect and their likelihood of being paid in the end.

The vet and the who-ever on SSI are going to eventually get that money. It will come. And it will then come to me. I'll be made whole. I'm fine with that.

The W-2 person who lost their job? Very little guarantee that they'll get re-hired elsewhere soon.

So, for me, it isn't as much about whose "fault" it is. It is about the likelihood of being paid for those missed payments. Those waiting on the government to get their crap together are very, very likely to get paid and can then pay me.

Telling them to make arrangements "now, in advance" is a little weird to me too. There hasn't been a ton of notice here -- and we might be looking at stopped payments in as little as a WEEK from now. There is likely little they can do in that timeframe to "make sure their rent is paid on time." Switching to weekly -- for a person who lives on disability or SSI -- doesn't make a lick of difference.

In any case, as I said above, to me it is about whether or not I'll get paid. I very likely will, so I'm willing to flex a little in this situation (for those, again, who actually ARE very likely to get paid).

It's your biz, so you get to run it.

Sometimes we run it with compassion. On the plus side, we get to be compassionate, but on the minus side, it can be delayed or expensive.

Sometimes we run it inflexibly. If someone has a story, or needs to be understood-- that's not your market, and you'll replace them with someone without a story, and without the need for understanding.

I've always struggled with the difference between "working together" vs "being used", and the difference between "cooperation" vs "enabling." It's been an expensive lesson for me, and I'm going to continue to make that mistake, because I prefer to err on the side of generosity. :)

Mike, I like that you are thinking about this. My much bigger concern on a default is how it will impact the real estate market place.

Thus far the Fed has been at war with inflation and has tried to cause an unemployment based slow down. The rate in which the Fed has raised rates may not have caused a record number of banks to fail, but if you look at the size of the banks that have failed thus far in 2023, the asset size is greater than 2008, 2009 and part of 2010 all combined - the peak years during the "great recession".

Although I am not sure exactly how a default would play out, it would not play out well for items measured in US Dollars - the value of the dollar would go down, and we might even loose the world currency status. So I would expect oil and gold prices to spike up, along with a couple percent increase in interest rates.

What organizations in your community will help out with the rent and utilities if her check doesn’t come in? Can you provider her with a list to call or apply to for assistance?

Is this working part time, or is their only income their VA benefits? Can they pick up a part time or short term job to assist?

Do they have the funds available to keep paying the utilities?

You said she usually pays about 3 weeks early, so that means she already hopefully paid what is due by early June. In which case, when is the rent actually due? If it is a case of her next payment is actually not due until July 1, but she normally receives her benefit check on the 7th and goes ahead and pays it then, there is no issue.

In that case, I would respond “here are some organizations that will assist with rent payments, utility payments, and food assistance. Once you do receive your check, if they assisted you, you can pay it forward for the next person’s emergency”.

Sometimes, they need documentation to get assistance. When that is the case, we do a “pay or quit notice” so they can take it into the organization to get rental assistance. Generally, the local Salvation Army will pay around half the month’s rent, with such a notice, and that buys some time.

As always, lots of great answers.

Although in general I don't care to much for dealing with people, I tend to be too soft. So I was leaning toward what plenty said until I read the other responses. Now I am conflicted.

On the other hand, I also think that it is irresponsible to not be prepared financially for things such as this, especially given that history repeats itself.

One of the things that really gets on my nerves is people not willing to be sure that they pay their bills, so I completely understand what Sid and Ken are saying.

Deanna sort of hit on what I was going to say in that this is where I have a battle with myself.

I was also thinking as John in that the government most likely will quit playing this silly game long enough to catch everyone back up and then you can hope that they are honest enough to catch you up.

I would wait to respond after we know if government defaults or not.

Personally, I would work with a great tenant.

Wait till June 1st and see what happens, then make a decision of whether you want to evict or work with her.

Last government default they sent home the Park Rangers for about 30 days and then gave them back pay.

To me there are two things I want to stay away from. First is loosing a great tenant and second is turning that great tenant into a bad entitled tenant by caving to demands. How many times have the words "give'm an inch and they take a mile" been posted on this site.

I find it interesting the number of people in this thread who seem to think that this Vet on public assistance must just be out wasting money all the time and THAT is the reason that they haven't "prepared" for this time in advance by saving up thousands of dollars for an emergency.

You make it sound like they should have just "saved up" over the past few months so that they had a few months of rent in reserves.

I think you have very little idea of how much they get for assistance and how hard it is for them to build up MONTHS worth of extra rent.

I would work hard to keep her without me getting "Used".

I would likely forward her a list of community resources, and encourage her to reach out to family or friends to help her.

Then, I would let her know, that because of her great tenant history, I would be willing to wait 2 weeks without any late fees. Unfortunately, I would need to provide notice after that period of time to "start the clock" since I rely on rent payments to make my mortgage payments.

People need to remember that this wouldn't be like a normal situation with one person losing their income temporarily. So many people here telling them to look at "community resources" or other assistance. But we're talking about a mass incoming system literally shutting down for everyone at the same time. I promise you that any of those "community" or church-based "resources" for people having trouble with their rent will be empty by the 2nd of the month if this happens.

There won't be any outside assistance left -- when something like SSI or other assistance for veterans stops all at once for everyone.

Typo. I meant "income system", not "incoming system."